3 Steps to Keep Your Money from Wrecking Your Kids

Amelia ZhangBlog

3 Steps to Keep Your Money from Wrecking Your Kids

Blessed financially? Consider these three things before you share your money with your children.

One of the most common concerns our clients have is to not let their money wreck their kids. Being blessed financially allows parents to do some neat things with and for their kids and provides some great advantages. However, financial wealth also brings complexity and unique risks. It is hard to walk the fine line between using our money to bless our kids and over doing it such that our financial blessing starts to become a curse. We all know families where children have been robbed of a work ethic, avoided tough (but needed) lessons, and/or became entitled. Basically, they have failed to launch well, sometimes not at all and the consequences have been devastating for the child and the family. Here are 3 steps to take to minimize this risk.

1. Give Your Kids the Gift of Struggle

Achieving success in any field is very difficult. The higher you rise in any realm, the fewer the people because the journey took so many off the path. The hard, challenging days that knock off the rough edges, create perseverance, and teach us to learn from our mistakes are the reasons eventually we often attain a greater level of success. Usually, we have some scars from these tough days and in our desire to help our kids have better lives than our own, we try to “protect” them from the scars. However, what we are doing is preventing them from the struggles that were critical in our development and the very reason for our eventual success. It's hard to watch others struggle, especially our kids, but much of the time the struggle is required for them to learn and to reach their potential. When have you learned and grown the most – in tough times or in easier times?

I have a great recipe for BBQ ribs that always brings compliments. After prep the ribs sit in the fridge overnight covered in the rub. Once the smoker is ready, the ribs take 6 hours of low, slow cooking. I expect there is a recipe for microwave ribs that, start to finish, likely only takes 30 minutes tops. I’m not interested in a quick, barely edible meal. I want a feast where the ribs have reached their absolute best. The ribs need time and the challenging environment to bring them to their best. Ironically the people who most often get these ribs are my kids. We love to bless our kids and we do so in many ways but one of the tougher ways is to question whether to help when they experience struggles. More often than not, we’ll make the tougher choice and not step in. Typically, I think back to when Kathy and I faced a similar struggle at a similar stage, made it through and are better for it. They will as well. I’m more concerned about the long game and who they will become in 10 or 20 years. I want them to have the gratification of reaching the top of their game. I want to be a catalyst not a hindrance. I need to give them the gift of struggle.

It is hard to walk the fine line between using our money to bless our kids and over doing it such that our financial blessing starts to become a curse.

2. Determine How Much is Enough for Your Kids

It's hard to make good decisions in the moment and without predetermining what our objectives are. It’s also hard to give ourselves perspective. For these reasons our Estate Planning process helps parents determine their objectives in blessing their kids and then our team determines what those objectives will cost and provides coaching on the optimal timing of the rollout. I unpack the importance and process of determining how much is 'enough' in a 3 minute read in my blog How Much is Enough for Your Children.

3. Love is Spelled T-I-M-E

Earlier I spoke about the personal cost for our success. There is usually a relational cost that is paid by us and unfortunately our family members had no choice in paying a cost for our success as well. It’s not uncommon for someone to have acquired significant financial currency but have low relational currency with their kids because there were limited deposits (time and energy) made in that account. If you find yourself in this situation its possible to make your future different than your past. This will take time to correct and often requires professional help, but the result will be worth the hard work and challenges to be able to enjoy relational success. Our team has seen some wonderful results from our professionals that work in this area.

Regardless of where you are in this journey, here's an easy next step. If you have kids at home, be intentional tonight about spending time with them. If you have an empty nest, give your kids a call on your way home tonight.

Gain Clarity, Contentment, and Freedom in your Family Wealth.

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